Would Amendment 3's revenue cap help or hurt?

TALLAHASSEE — Supporters of the government-revenue limit on the November ballot call it a common-sense check on the temptation for Florida policymakers to spend beyond taxpayers' means.

Critics of Amendment 3 call it something else: too conservative for even Arizona.

If it garners 60 percent of the vote Nov. 6, the proposal by the Republican-controlled Legislature would place a tighter cap on state government's revenues — and hence spending — using a formula based on inflation and population changes.

The cap would be phased in during five years beginning in 2014. Florida could take in more than $30 billion in revenues next year, and eventually money that exceeds the cap would have to be put into the state's emergency budget reserve, be used to replace property-tax dollars that local school districts are required to spend on classrooms, or be refunded to taxpayers. The Legislature could also raise the limit by a supermajority vote.

State economists and critics differ on the potential financial impact to the state.

The proposal is a compromise crafted by conservative policymakers who have tried for years to place tighter spending limits into Florida's constitution.

"The premise of it is clear," said Senate President Mike Haridopolos, the Merritt Island Republican who has pushed the issue his entire legislative career. "What's so radical about saying government spending should not increase faster than a person's income?"

Florida has a revenue limit — tied to personal income growth — that was enacted in 1994. But income growth since then has been large enough to prevent government revenues from ever piercing the cap.

The Legislature's own economic analysis of the amendment last year suggested Florida would have blown through the new cap only once in the past 18 years — during the housing bubble in 2006. The analysis also suggested revenues would stay below the cap through at least 2020, although that analysis doesn't take into account the impact of the federal health-care law, which would mandate more state spending through the Medicaid program.

Nonetheless, critics call it a draconian move that would damage education, road-building and other government services, much like Colorado's much-maligned Taxpayers Bill of Rights, or TABOR. That measure — the first of its kind — was passed in 1992 but suspended by state voters in 2005 after it led to dramatic clashes among constituent groups for public services. Per-student spending in classrooms and universities, among other programs, took double-digit-percentage losses in funding.

Colorado's act also limited government-revenue growth to a strict formula of population and inflation growth, although Florida's proposal has more wiggle room.

Even Arizona Gov. Jan Brewer, the face of hard-line-conservative immigration overhaul, vetoed a similar revenue cap last year, saying policymakers should learn from the failed Colorado experiment.

Florida's version has drawn organized opposition from teachers and public-employee unions, voting-rights groups and the Oakland, Calif.-based religious community organization PICO, which works for "equitable funding for schools." It has given $100,000 to a political fund to fight the amendment called "No on 3."

"It has kept businesses from coming to Colorado with good-paying jobs. It has had a very marked impact on health care and infrastructure," said Florida League of Women Voters President Deirdre Macnab, whose group is opposing the amendment. "These kinds of failed issues in other states are the last thing the Legislature should be bringing to the people of Florida."

The left-leaning, Washington-based Center of Budget and Policy Priorities estimated that if the amendment were in place today, it would reduce state revenues by $11 billion during a decade.

The report predicted that pre-K-to-12 education, college and university budgets would be disproportionately affected because they make up half the services supported by the revenues being capped. And it said the cap could impair Florida's bonding ability and credit rating down the road if it becomes harder to divert tax dollars to finance bonding for infrastructure.

"The state Legislature designed it not to bite into revenues for several years. And this masks what it is intended to do. But that bite will eventually occur," said Erica Williams, a policy analyst at the center, at a news conference earlier this month.

But supporters point to the "escape hatch" that would allow future lawmakers to surpass the cap with a two-thirds vote of the House and Senate.